To try to keep it simple, shielding and balanced cables are never vital. If all you have are 1/4" unbalanced cables you can still make recordings.
The primary purpose of balanced cables and shielding (and super high-end Monster cables for that matter) is to limit the introduction of "noise" and maximize the full clarity of an audio source.
If you don't have balanced cables, or gear that used balanced in/outs, you can still do things to limit the introduction of noise to your audio. Most noise is introduced by "induction". This is basically magnetic interference. Anytime an electrical signal conducts through a wire a magnetic field is created. Therefore, two wires next to each other, or even one wire looped around or over itself can theoretically induce a new signal into thw wire.
In practice, you will typically only pickup noise if you run your mic cable along the length of a power-cord, or other devices that produce more significant magnetic fields.
Hope that helps!
-Shaz
